Class Action Lawsuit Filed Against Four Connecticut Energy Providers

Class Action Lawsuit Filed Against Four Connecticut Energy Providers

Posted By Golomb & Honik || 28-Jan-2015

Four Connecticut power companies have been accused of over-charging consumers, and have recently had a class action lawsuit filed against them. The companies are Discount Power, Viridian Energy, North American Power and Direct Energy, and are being charged with deceptive practices. The lawsuit alleges that four power companies made claims in the contracts they entered into with consumers to the effect that the variable power rates will go up and down, depending on the wholesale cost of electricity. Instead, even when the wholesale prices dropped, the power companies continued to charge customers higher kilowatt hour rates-in some cases as much as five times the wholesale price.

Power Companies Offered "Teaser Rates"

Consumers in Connecticut are given a choice of power companies for their home, and many chose to stay with Connecticut Light and Power. Other consumers, who might be having trouble paying their power bills, were lured to other power suppliers who promised lower rates. The suppliers buy and re-sell energy for a profit, but it appears the profits received by the four power companies were much higher than they deserved-at a cost to their consumers.

The lawsuit claims the companies offered what is known as a "teaser rate," which they put into effect for a few short months. When the teaser rate expired, it automatically shifted to a variable rate, causing the prices to skyrocket. Only one of the power companies involved in the class-action suit responded to requests for comment. A North American Power spokesman stated the lawsuit has no merit and that their company consistently provides written notice to consumers when the variable rate is about to go into effect.

Class-Action Lawsuits against Other Power Companies Filed Earlier

This lawsuit follows closely on the heels of another class action lawsuit filed against Connecticut-based electric company, Starion Energy in the amount of $50 million. The Starion lawsuit was filed in the U.S. District Court for the Southern District of New York on behalf of consumers who had been promised significant savings on their energy bills if they switched from the current energy supplier to Starion. After the customers switched companies, they found the rates they were being charged were two to three times the rates they had been quoted.

Starion Energy has a pattern of deceptive sales practices; in early 2014 the Maryland Public Service Commission determined the company had a pattern of misrepresentation toward potential customers. While Starion received a fine, they continued to perpetrate the fraud against consumers, particularly elderly consumers who were having trouble paying their power bills.

De-regulation of the Electric Energy Benefitted Suppliers

Many energy suppliers benefitted when the electric industry was deregulated, and Starion Energy was no exception. Starion has more than 30,000 customers in Connecticut alone, with thousands more in seven additional states, and is one of the fastest-growing energy suppliers in the United States.

The Starion lawsuit was filed in early November and has been given several weeks to respond to allegations. The Starion lawsuit asks for a jury trial, triple the amount of damages, compensatory damages, and an order to stop Starion from perpetrating further deception on consumers.

Hiko Energy, Palmco Power New Jersey, Keil & Sons, and Palmco Energy New Jersey all have similar lawsuits pending against them. The Hiko Energy lawsuit filed by the lawyers at Golomb & Honik, P.C. in particular, claims that consumers were promised a ten percent reduction in monthly bills for the first six months-instead their bills immediately went up. Hiko customers were given no avenue for reaching the company with their complaints, and no way to terminate their contracts.

The recent class action suit against Discount Power, Viridian Energy, North American Power and Direct Energy has not been answered by the power companies, and many consumers are anxiously awaiting just how the companies will justify the increases in monthly bills.

Contact National Consumer Protection Lawyers

If your electricity rates have increased suddenly after switching to a different service provider, you may have cause to file a claim. The lawyers at Golomb & Honik are actively litigating consumer complaints of rate spikes by deceptive and fraudulent electric companies. For a free review of your case, call the Pennsylvania consumer protection lawyers at Golomb & Honik today at 1-800-355-3300 or 1-215-985-9177 or fill out our confidential Contact Form.

The consumer protection lawyers at Golomb & Honik have successfully represented individuals in Philadelphia, Pennsylvania, New Jersey, and throughout the United States.

Categories: Class Action
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